Are the credit classifications of commissioned loans and current loans the same?

The credit classifications of commissioned loans and current loans are different.

1. Bank entrusted loan means: bank entrusted loan. Bank entrusted loans refer to personal entrusted loans launched by banks, that is, personal entrusted loans where the principal is the bank. When banks launch personal entrusted loans, they mainly play the role of bank credit intermediaries, connect the two parties of private lending, and act as supervisors and witnesses. For example: a bank entrusted loan means that A borrows money from B, and AB and AB sign an "entrusted loan agreement" with the bank. A deposits the money into the bank, and the bank lends it to B. As a supervisor and witness, the bank investigates and understands A in the early stage and is responsible for supervising the safety of funds and subsequent principal recovery. The purpose of this is to use the bank's risk control capabilities to make the procedures more compliant with relevant regulations. Loan conditions: The client of a personal entrusted loan can be a government agency, an enterprise or an individual. The borrower of a personal entrusted loan must be a natural person with full civil capacity and have a legal and valid identity certificate.

2. Current loans are working capital loans, which are loans issued to meet the short-term capital needs of enterprises in the production and operation process and ensure the normal progress of production and operation activities. According to the loan term, it can be divided into short-term working capital loans with a term of less than one year and medium-term working capital loans with a term of one to three years. According to the loan method, it can be divided into secured loans and credit loans, among which secured loans are divided into guarantee, mortgage and pledge forms. According to the usage method, it can be divided into short-term revolving loans that are applied for and reviewed one by one, and short-term revolving loans that can be borrowed, used and repaid within the time and limit specified by the bank.

Overview of the risks of entrusted loans

Do you know what the main risks of entrusted loans are? Entrusted loans refer to the loan business in which the principal provides funds from legal sources, and the entrusted bank issues, supervises the use and assists in the recovery of the loan based on the loan object, purpose, amount, term, interest rate, etc. determined by the principal. The following is an overview of entrusted loan risks that I compiled for you_Introduction to entrusted loan risk knowledge, I hope it is useful to you!

__ Table of Contents__

Overview of entrusted loan risks

Definition of entrusted loans

Risk classification of entrusted loans

Risk prevention of entrusted loans

Overview of entrusted loan risks

Although listed companies The use of large-scale funds for financial management and lending is a new phenomenon that has emerged in the past two years. However, according to the "Analysis of Entrusted Financial Management and Entrusted Loans of Shanghai Listed Companies in 20__" recently released by the Capital Market Research Institute of the Shanghai Stock Exchange, 20__ In 2016, the phenomenon of entrusted financial management and entrusted loans by listed companies in Shanghai has become more and more obvious, and the high risks in related aspects have begun to emerge.

According to statistics, the beginning balance of entrusted financial management in 20__ was 23.904 billion yuan, the debit amount was 118.060 billion yuan, the credit amount was 124.843 billion yuan, and the year-end balance was 17.119 billion yuan. Compared with 2010, the balance of entrusted financial management has declined to a certain extent, but the amount incurred during the period has increased significantly compared with 2010 (debit amount 79.017 billion yuan, credit amount 55.916 billion yuan).

As for entrusted loans, the beginning balance of entrusted loans in 20__ was 64.383 billion yuan, the debit amount was 86.014 billion yuan, the credit amount was 41.643 billion yuan, and the year-end balance was 108.754 billion yuan.

The report pointed out that although there have been no huge losses in listed companies due to entrusted financial management and entrusted loans in the past two years, the high risks in this area have begun to emerge. Among the companies that issued entrusted loans, a total of 6 listed companies had overdue payments as of the end of 20__; in addition, the loans of listed companies were forced to frequently extend their loan periods and even were involved in litigation, which also revealed the high risk of entrusted loans. According to statistics, at the end of the reporting period, the balances of extended, overdue and litigation-related entrusted loans were 8.192 billion yuan, 2.208 billion yuan and 57 million yuan respectively.

Shanghai Stock Exchange analysis believes that some listed companies are keen on entrusted financial management and entrusted loans may be due to the following main reasons:

First of all, in the context of tightening monetary policy and property market regulation, small and medium-sized manufacturing companies Enterprises, real estate, mining and other industries have a large demand for funds, which provides fertile ground for rapid growth. Its ultra-high returns quickly attract funds from all walks of life.

Some companies are more motivated to engage in entrusted financial management and entrusted loans when their main business is in a downturn, and interest income is becoming the main source of profit for some companies whose main business is in a downturn. For example, a company's net profit in 20__ was 188 million yuan, but it had as many as 20 entrusted loans in 20__ with a balance of 367 million yuan. The loan interest rate was generally around 20. It can be seen that the interest income has a great impact on its performance. huge.

Secondly, the phenomenon of over-raising of some newly listed companies has resulted in a large amount of idle funds and abundant self-owned funds. Some companies announced the use of their own idle funds for entrusted financial management shortly after the over-raising of listings.

At the same time, listed companies can use temporarily idle raised funds to temporarily supplement working capital, convert them into their own funds, and then use them for entrusted financial management or entrusted loans. In addition, it cannot be ruled out that under the temptation of the market, some listed companies may have the motivation to make loans at high interest rates by changing the use of raised funds and supplementing working capital.

Finally, there is the possibility that some companies can use the favorable financing platform of listed companies to obtain cheap funds through corporate bonds or short-term financing bonds and "resell" them to earn interest differentials.

For example, a company issued 9.5 billion yuan of corporate bonds in May 20__, which were used to repay commercial bank loans and supplement the company's working capital at a ratio of 1:1, but in June it was decided to use 4 billion yuan of its own funds are invested in financial products with a term of 1-2 years.

The Shanghai Stock Exchange stated that it is understandable for listed companies to get involved in entrusted financial management and entrusted loans, but driven by high interests, it can easily evolve into a disguised form of granting. Relevant macro management departments take effective measures to rationally allocate social funds, alleviate the contradictions in the capital needs of small and medium-sized enterprises, and stabilize the market's capital costs;

Listed companies should also strengthen risk control and management in entrusted financial management and entrusted loans. The decision-making process cannot be a one-sided pursuit of high interest income at the expense of risks. At the same time, it is necessary to strengthen supervision on the formulation of fund-raising plans for listed companies. In addition, based on the current information disclosure situation of entrusted financial management and entrusted loans, it is necessary to refine the information disclosure requirements in this area, further improve the information content of entrusted financial management and entrusted loans, and enhance the transparency of information disclosure.

The definition of entrusted loan

Entrusted loan refers to the transfer of funds from legal sources provided by the client to the general entrusted deposit account of the entrusting bank. The entrusting bank determines the loan object and purpose according to the client. , amount, term, interest rate and other loan business, supervise the use and assist in the recovery of loans. The client can be government departments, enterprises, institutions, individuals, etc. The lender (i.e. the trustee) disburses the loan based on the loan object, purpose, amount, term, interest rate, etc. determined by the principal, supervises the use and assists in the recovery of the loan. The lender (trustee) only charges a handling fee and does not bear the risk of the loan.

Article 920 of the Civil Code (Effective on January 1, 2021) Entrustment authority: The client can specifically entrust the trustee to handle one or several matters, or can generally entrust the trustee to handle all matters.

Risk classification of entrusted loans

According to the "General Principles of Loans" and the "Notice on Issues Concerning the Offering of Entrusted Loans by Commercial Banks", in the entrusted loan business, the client shall bear the loan risks. , banks do not bear loan risks, therefore, entrusted loans are considered to be low-risk business of banks, but for banks, entrusted loans are not completely risk-free. In fact, there are many risks that cannot be ignored when the trustee bank handles business.

1. Policy risks.

In terms of business access, when commercial banks start entrusted loan business, have they reported to the China Banking Regulatory Commission for approval or filing, and have they obtained the qualifications to operate entrusted loans? If some bank branches fail to report to the local banking regulatory department as required when starting business, In terms of policies and regulations, whether the objects, uses, and projects of entrusted loans are subject to compliance review, and whether regulations on the terms, interest rates, etc. of entrusted loans are strictly implemented. In actual practice, some trustee banks believe that as long as both the client and the borrower reach an agreement, they can determine the interest rate level at will, which often violates the relevant regulations of the People's Bank of China.

2. Operational risk. Refers to the risks caused by commercial banks failing to follow regulations and procedures in specific operations such as due diligence, review and approval, signing of legal documents, use of loan funds, collection and repayment of loan principal and interest, and collection of handling fees for entrusted loans. If the bank as trustee fails to fully perform its obligations under the entrustment agreement, or fails to standardize operations in pre-loan investigation, loan disbursement, fund use monitoring, overdue loan collection, etc., once the loan is lost, the client may claim that the bank failed to fulfill its duties. The bank shall bear corresponding responsibilities.

3. Bank reputation risk. When an entrusted loan cannot recover the principal and interest on time and repay it to the client in a timely manner, it will affect the reputation of the entrusted bank. Therefore, the bank bears the credit risk and reputation risk of the entrusted loan.

4. Compliance risks. In terms of funding sources, some banks have illegally accepted entrusted loans from social security funds, corporate annuities, extra-budgetary funds, labor union funds, insurance funds, foundation funds, housing agency maintenance fees, etc., resulting in inconsistent funding sources. regulations; in terms of the use of funds, some borrowers use entrusted loans to invest funds in industries prohibited and restricted by national industrial policies or in enterprises and projects that do not meet standards. There are also some banks that do not strictly monitor the use of loan funds. For example, a borrower applies for working capital from the trustee bank, but it is used to invest in real estate or purchase equipment, resulting in non-compliant use of funds. Once problems arise, commercial banks cannot escape the blame.

5. Legal risks. As the trustee, the entrustment contract signed by the bank and the entrusting party must be a legal document signed by the legal person and the entrusting party. However, some branches do not meet the conditions of contracting parties but act as first-level legal persons, which leads to legal risks. When some banks promote entrusted loans to the outside world, they fail to accurately define the nature of entrusted loan products, trust business, and savings deposit business. If the law arises, they will face the threat of litigation and may be punished by regulatory authorities. In addition, some handling personnel have weak legal awareness and make irresponsible promises or perform functions beyond their authority, which can easily cause legal risks and involve banks.

Entrusted loan risk prevention

1. Enhance risk management awareness, which is the basis and prerequisite for banks to prevent entrusted loan risks. Bank senior managers, represented by the board of directors and senior management, should first improve their understanding of the risks of entrusted loans, organize relevant department personnel to conduct training, and implement risk management into the responsibilities and behaviors of grassroots employees.

2. Strengthen operational risk management. In the pre-loan investigation process, the materials provided by the client, the legality of the loan purpose, whether the loan interest rate meets the regulations, and the borrower’s civil subject qualifications should be investigated and verified in accordance with relevant regulations. , legal compliance of fund sources and other contents. In the review and approval process, due diligence review and approval should be carried out in accordance with the prescribed procedures, and the review and approval should be reported to the authorized approver according to the internal authorization of each bank. Reverse procedures and excessive authority approval are not allowed.

3. During the loan off-counter process, the borrower should be required to open an entrusted loan fund account at the handling bank in accordance with relevant national regulations and sign a guarantee contract with the guarantor. The loan contract and guarantee contract will take effect. The loan can only be processed after the entrusted deposit of the client has been entered into the fund account. The principal shall first deposit the entrusted funds in the special account of the entrusted bank. Under any circumstances, the entrusted bank shall not lend to the borrower in advance before the entrusted funds are in place.

4. In the loan fund monitoring process, the handling agency should supervise the borrower's use of credit funds for specified purposes to prevent loan funds from being misappropriated. The purpose of the loan has been clearly stipulated in the entrustment contract. The funds are earmarked and cannot be changed by the entrusted bank without authorization.

And conduct post-loan inspections in accordance with loan management requirements, and promptly notify the client of the inspection results. Urge borrowers to repay the principal and interest of the loan on time as stipulated in the loan contract. Even if there is a conflict of interest between entrusted loans and self-operated loans, the entrusted bank cannot use its advantageous position to privately withhold the principal's funds or the borrower's repayment to the principal.

5. During the overdue loan collection process, the handling bank should promptly notify the client of the overdue interest on the loan and take corresponding collection measures. After the loan is overdue, the handling bank shall assert its rights against the guarantor within the statutory or agreed guarantee period, ensure that a written collection notice is sent to the borrower within the statute of limitations and obtain written evidence of collection.

6. Strengthen compliance risk management. Commercial banks must conduct in-depth investigations and review the legality of the sources of entrusted loan funds. Certain types of special funds that have specific purposes and cannot be misappropriated cannot be accepted as sources of entrusted loan funds in accordance with national regulations. Banks are not allowed to advance funds to issue entrusted loans, and banks' own credit funds are not allowed to be used as a source of entrusted loan funds.

7. Commercial banks should review the compliance of the issuance of entrusted loan funds. Review whether the borrower has legal entity qualifications and ensure that all project procedures are complete. Entrusted loans shall not be issued to industries prohibited or restricted by national industrial policies, and projects with incomplete procedures, prohibited or restricted by national policies, or substandard projects shall not be involved. Loan procedures must be complete and pay attention to whether there are any legal loopholes; whether the terms of various legal documents are strict and whether there are potential legal risks.

8. Strengthen legal risk management. In the process of handling entrusted loans, handling agencies should go through review procedures in accordance with the relevant legal text review system to sign legal documents to ensure that all legal documents are legal and compliant. They must not use Supplementary agreements and other forms promise the principal that the bank will assume risks for the entrusted loan.

9. Strengthen the internal control system. China Construction Bank should formulate a practical internal management system in accordance with the "General Rules for Loans" and the "Notice on Issues Concerning the Launch of Entrusted Loans by Commercial Banks", and at the same time formulate an internal risk control management system. , so that personnel at all levels have rules to follow, and systematically build a line of defense against entrusted loan risks.

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What does bank entrusted loan mean?

Entrusted loans refer to loans issued by trust institutions in accordance with the requirements specified by the entruster.

The source of funds for this kind of loan is special trust deposits. The object, quantity and purpose of the loan are determined by the client. The trust institution is only responsible for the review and issuance of the loan, supervision of use, recovery at maturity and calculation of collection. Interest and other matters are not responsible for profits and losses.

Trust institutions only charge certain handling fees as stipulated in the contract.

What is a trust loan? What is the difference between trust loans and entrusted loans?

When talking about loans, we often hear two forms of loans, one is a trust loan and the other is an entrusted loan. So what is a trust loan? What's the difference between the two? Let’s take a closer look below.

The so-called trust loan simply means that the trustee will release the funds of the client in the form of a loan according to the pre-agreed use, interest rate, period and other matters, and when it expires A form of financial business that is responsible for collecting the money on time. When distributing this fund, the bank has a high degree of freedom in the selection of recipients and the use of funds, and can also rely on the trust company's credit and fund management advantages to enhance the security of the fund.

So, what is the difference between trust loans and entrusted loans?

First of all, the nature of funds is different.

Entrusted loans only make certain adjustments to the use of funds. The entrusting unit that was supposed to allocate money should be replaced by a loan from a financial trust institution, and the relationship between the entrusting unit and the user unit has been changed into a credit relationship between the trust institution and the beneficiary. However, this change has not changed the relationship between the trust institution and the beneficiary. The nature of the funds has no impact. In this regard, trust loans use trust deposits and self-owned funds, and independently choose the objects and uses of the loans on the premise of ensuring the benefits of the beneficiaries. Therefore, the nature and use of the funds are essentially changed accordingly, making them more capable. Characteristics of bank loans.

Secondly, the impact on credit is different

Because entrusted loans only use the entrusted funds according to the wishes of the entrusting unit, the entrusted funds can generally be regarded as one-time. Therefore, the impact on the credit plan is not large, and the expansion of the credit scale is relatively small. On the other hand, trust loans are a repetitive form of loans, and funds will continue to circulate, so they will have a relatively large impact on the credit scale and credit plan.

The above is the difference between trust loans and entrusted loans introduced to you. I hope it can bring you some help.

On which credit report is the entrusted loan credit report displayed?

The entrusted loan credit report will be displayed on your personal credit report. These reports will provide information about your credit. Detailed information about your history, including your history of loans, credit cards, and other financial transactions. These reports can help you understand your credit health so you can better manage your finances, and they can help you understand your credit risk so you can better control your finances.